Tax on buyback likely to affect valuation of Indian IT firms

A new tax on buyback of shares by public companies is likely to make enterprises ditch the buyback route. A 20% tax will be levied on the amount of buyback consideration less issue price, taking the sheen off buybacks. In recent years, IT firms have frequently taken the buyback route, which presents it a more flexible way of returning money to shareholders, compared to dividends.READ MORE